SAVAGE, MN -- (MARKET WIRE) -- May 9, 2007 -- GreenMan Technologies, Inc. (
OTCBB:
GMTI), a
leading recycler of over 12 million scrap tires per year in the United
States, today announced results for the three and six months ended March
31, 2007.
Lyle Jensen, GreenMan's President and Chief Executive Officer, stated:
"Despite the harsh mid-west winter generating lower levels of inbound scrap
tires, I am pleased with our team's performance which exceeded
expectations. We came through the industry's typical slowest quarter in
better shape than we have for years. Stronger end-product demand and an
ongoing effort to reduce operating costs resulted in higher gross profits
and improved EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization). Overall revenue for the March 2007 quarter was 10 percent
higher than the same period last year despite a 2% drop in the inbound tire
volume. Gross margins for the 2007 second quarter were a full three points
higher than the same period a year ago due to favorable product mix and
cost controls. Earnings from continuing operations and before interest,
tax, depreciation, and amortization ("EBITDA") exceeded $270,000 for the
quarter ended March 31, 2007 as compared to $135,000 for the quarter ended
March 31, 2006."
Mr. Jensen added, "We enter our seasonally and historically stronger second
half of our fiscal year with over 10 million pounds of crumb rubber
inventory ready to meet the strong demand we've created for our products.
We remain on track to meet our Fiscal 2007 objectives."
Chuck Coppa, GreenMan's Chief Financial Officer, stated, "Today, we are
also pleased to announce an agreement with our primary lender, Laurus
Master Fund, Ltd., whereby Laurus has agreed to reduce required principal
payments during the period of July 2007 through September 2008 by an
aggregate amount of $1,500,000. This amount will be deferred and payable at
the June 2009 maturity date." Mr. Coppa added, "We greatly appreciate the
continued support and cooperation of Laurus. The deferral will positively
impact our near-term financial condition and allow us to remain focused on
our efforts to identify and support accretive opportunities as we work
towards increasing shareholder value."
Please join us tomorrow, Thursday, May 10, 2007 at 12:00 PM EDT for a
conference call in which we will discuss the results for the quarter ended
March 31, 2007. To participate, please call 1-800-632-2975 and ask for the
GreenMan call. A replay of the conference call can be accessed until 11:50
PM on May 11, 2007 by calling 1-877-519-4471 and entering pass code
8774067.
GreenMan collects and recycles over 12 million tires annually into
alternative fuel, alternative energy and innovative products. Today, our
products are used as an efficient alternative fuel in large industrial
boilers, as a substitute for crushed stone in civil engineering
applications and as crumb rubber in playground and sport surfaces,
rubberized asphalt and landscaping applications. We pursue technological
processes and unique marketing programs intended to maximize the value of
each tire we manage. To learn more, please visit our website at
www.greenman.biz
In September 2005, due to the magnitude of continued operating losses, our
Board of Directors approved separate plans to divest the operations of our
Georgia and Tennessee subsidiaries and dispose of their respective assets.
In addition, due to continuing operating losses, in July 2006 we sold our
California subsidiary. Accordingly, we have classified all three respective
entity's results of operations as discontinued operations for all periods
presented in the consolidated financial statements.
Three Months Ended March 31, 2007 Compared To The Three Months Ended March
31, 2007
Net sales from continuing operations for the three months ended March 31,
2007 increased $305,000 or 10 percent to $3,464,000 as compared to
$3,159,000 for the quarter ended March 31, 2006. Our continuing operations
processed approximately 2.23 million passenger tire equivalents during the
quarter ended March 31, 2007 compared to approximately 2.27 million
passenger tire equivalents during the same period last year. The increase
in revenue was primarily attributable to the inclusion of approximately
$198,000 of revenue and 100,000 passenger tire equivalents associated with
an Iowa scrap tire cleanup project which was completed during the quarter.
The inclusion of scrap tire cleanup contributed to an aggregate 11 percent
increase in overall tipping fees (fee we are paid to collect and dispose of
a scrap tire) per passenger tire in addition to a 6 percent increase in
overall product revenues during the quarter ended March 31, 2007.
Gross profit for the three months ended March 31, 2007 was $775,000 or 22
percent of net sales, compared to $594,000 or 19 percent of net sales for
the three months ended March 31, 2006. Our cost of sales increased $124,000
or 5 percent primarily due to increased processing residual waste costs due
to the completion of several large civil engineering projects (which use
more of the scrap tire including waste wire) during the quarter ended March
31, 2006.
Selling, general and administrative expenses for the three months ended
March 31, 2007 increased $123,000 to $901,000 or 26 percent of net sales,
compared to $778,000 or 25 percent of net sales for the three months ended
March 31, 2006. The increase was primarily attributable to an increase of
approximately $103,000 in wages and performance based incentives and the
re-allocation of approximately $37,000 of net corporate operating expenses
which were absorbed by discontinued operations during the three months
ended March 31, 2007.
As a result of the foregoing, we had an operating loss from continuing
operations of $126,000 during the three months ended March 31, 2007 as
compared to an operating loss of $184,000 for the same period last year.
Interest and financing expense for the three months ended March 31, 2007
decreased $63,000 to $523,000, compared to $586,000 during the three months
ended March 31, 2006. The decrease is attributable to the elimination of
$306,000 of non-cash financing fees and interest incurred during the three
months ended March 31, 2006 associated with Laurus credit facility which
was restructured in June 2006. This reduction was offset by the inclusion
of approximately $145,000 of deferred interest associated with the June
2006 Laurus credit facility restructuring, increased rates and the
allocation of all Laurus related cash interest to continuing operations
during the fiscal year ended September 30, 2006 (approximately $25,000 was
allocated to discontinued operations during the three months ended March
31, 2006).
As a result of the foregoing, our net loss after income taxes from
continuing operations for the three months ended March 31, 2007 decreased
$120,000 or 16 percent to $648,000 or $.03 per basic share, compared to a
net loss of $768,000 or $.04 per basic share for the three months ended
March 31, 2006.
The $512,000 net loss ($.03 per basic share) from discontinued operations
for the three months ended March 31, 2006 includes approximately $12,000
associated with our Georgia operations and approximately $500,000
associated with our California operations.
Our net loss for the three months ended March 31, 2007 decreased $632,000
or 49 percent to $648,000 or $.03 per basic share as compared to a net loss
of $1,280,000 or $.07 per basic share for the three months ended March 31,
2006.
Six Months ended March 31, 2007 Compared to the Six Months ended March 31,
2006
Net sales from continuing operations for the six months ended March 31,
2007 increased $916,000 or 12 percent to $8,351,000 as compared to
$7,435,000 for the six months ended March 31, 2006. Our continuing
operations processed 8 percent more or approximately 5.88 million passenger
tire equivalents during the six months ended March 31, 2007 compared to
approximately 5.43 million passenger tire equivalents during the same
period last year. The increase in revenue was attributable to increased
volume on which we realized a 6 percent increase in overall tipping fees
(fee we are paid to collect and dispose of a scrap tire) per passenger tire
in addition to an 11 percent increase in overall product revenues during
the six months ended March 31, 2007. The increase in revenue and inbound
volume included approximately $350,000 of revenue and 167,000 passenger
tire equivalents associated with an Iowa scrap tire cleanup project which
was completed during the six months ended March 2007.
Gross profit for the six months ended March 31, 2007 was $2,258,000 or 27
percent of net sales, compared to $1,898,000 or 26 percent of net sales for
the six months ended March 31, 2006. Our cost of sales increased $556,000
or 10 percent primarily due to increased collection and processing costs
associated with higher inbound volume and $113,000 of increased processing
residual waste costs due to the completion of several large civil
engineering projects (which use more of the scrap tire including waste
wire) during the six months ended March 31, 2006.
Selling, general and administrative expenses for the six months ended March
31, 2007 increased $316,000 to $1,869,000 or 22 percent of net sales,
compared to $1,553,00 or 21 percent of net sales for the six months ended
March 31, 2006. The increase was primarily attributable to an increase of
approximately $263,000 in wages, performance based incentives and outside
commissions in addition to the
re-allocation of approximately $90,000 of net corporate operating expenses
which were absorbed by discontinued operations during the six months ended
March 31, 2006.
As a result of the foregoing, we had operating income from continuing
operations of $389,000 during the six months ended March 31, 2007 as
compared to operating income of $345,000 for the six months ended March 31,
2006.
Interest and financing expense for the six months ended March 31, 2007
decreased $475,000 to $1,046,000 compared to $1,521,000 during the six
months ended March 31, 2006. The decrease is attributable to the
elimination of $961,000 of non-cash financing fees and interest incurred
during the six months ended March 31, 2006 associated with Laurus credit
facility which was restructured in June 2006. This reduction was offset by
the inclusion of approximately $283,000 of deferred interest associated
with the June 2006 Laurus credit facility restructuring, increased rates
and the allocation of all Laurus related cash interest to continuing
operations during the fiscal year ended September 30, 2006 (approximately
$52,000 was allocated to discontinued operations during the six months
ended March 31, 2006).
As a result of the foregoing, our net loss after income taxes from
continuing operations for the six months ended March 31, 2007 decreased
$530,000 or 44 percent to $667,000 or $.03 per basic share, compared to a
net loss of $1,197,000 or $.06 per basic share for the six months ended
March 31, 2006.
During the six months ended March 31, 2007, several vendors issued credits
relating to past due amounts, we recovered some bad debts and reduced
certain accrued expenses which offset a $19,000 increase in our Georgia
lease settlement reserve resulting in $10,000 ($.00 per basic share) of
income from discontinued operations. The $1,490,000 net loss ($.08 per
basic share) from discontinued operations for the six months ended March
31, 2006 includes approximately $759,000 associated with our Georgia
operations and approximately $732,000 associated with our California
operations.
Our net loss for the six months ended March 31, 2007 decreased $2,030,000
or 76 percent to $657,000 or $.03 per basic share as compared to a net loss
of $2,687,000 or $.14 per basic share for the six months ended March 31,
2006.
Condensed Unaudited Consolidated Statements of Operations
Three Months Ended Six Months Ended
March 31, March 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net sales $ 3,464,000 $ 3,159,000 $ 8,351,000 $ 7,435,000
Cost of sales 2,689,000 2,565,000 6,093,000 5,537,000
------------ ------------ ------------ ------------
Gross profit 775,000 594,000 2,258,000 1,898,000
Selling, general
and administrative 901,000 778,000 1,869,000 1,553,000
------------ ------------ ------------ ------------
Operating (loss)
income from
continuing
operations (126,000) (184,000) 389,000 345,000
------------ ------------ ------------ ------------
Other income
(expense):
Interest and
financing
expense (523,000) (586,000) (1,046,000) (1,521,000)
Other, net -- 2,000 (11,000) (21,000)
------------ ------------ ------------ ------------
Other (expense),
net (523,000) (584,000) (1,057,000) (1,542,000)
Loss from
continuing
operations (648,000) (768,000) (667,000) (1,197,000)
Discontinued
operations:
Gain (loss) from
discontinued
operations -- (512,000) 10,000 (1,490,000)
------------ ------------ ------------ ------------
Net loss $ (648,000) $ (1,280,000) $ (657,000) $ (2,687,000)
============ ============ ============ ============
Loss from
continuing
operations per
share - basic $ (0.03) $ (0.04) $ (0.03) $ (0.06)
Loss from
discontinued
operations per
share - basic -- (0.03) -- (0.08)
------------ ------------ ------------ ------------
Net loss per share $ (0.03) $ (0.07) $ (0.03) $ (0.14)
============ ============ ============ ============
Weighted average
shares outstanding 21,526,000 19,225,000 21,496,000 19,153,000
============ ============ ============ ============
Condensed Unaudited Consolidated Balance Sheet Data
March 31, September 30,
2007 2006
----------- -----------
Assets
Current assets $ 3,055,000 $ 3,463,000
Property, plant and equipment,net 5,521,000 5,807,000
Other assets 297,000 232,000
Assets related to discontinued operations -- 7,000
----------- -----------
$ 8,873,000 $ 9,509,000
=========== ===========
Liabilities and Stockholders' (Deficit)
Current liabilities $ 4,153,000 $ 4,045,000
Liabilities related to discontinued operations 3,328,000 3,415,000
Notes payable, non-current 10,890,000 10,874,000
Capital lease obligations, non-current 1,585,000 1,615,000
Deferred gain on sale leaseback 325,000 343,000
Obligations due under lease settlement,
non-current 581,000 630,000
Stockholders' deficit (11,989,000) (11,413,000)
----------- -----------
$ 8,873,000 $ 9,509,000
=========== ===========
"Safe Harbor" Statement: Under the Private Securities Litigation Reform Act
With the exception of the historical information contained in this news
release, the matters described herein contain "forward-looking" statements
that involve risk and uncertainties that may individually or collectively
impact the matters herein described, including but not limited to the
possibility that we may not be able to secure the financing necessary to
return to profitability, the possibility that the delisting of our stock by
the American Stock Exchange could substantially limit our stock's future
liquidity and our ability to raise capital, the possibility that we may
not realize the benefits of product acceptance, economic, competitive,
governmental, seasonal, management, technological and/or other factors
outside the control of the Company, which are detailed from time to time in
the Company's SEC reports, including the annual report on Form 10-KSB for
the fiscal period ended September 30,2006. The Company disclaims any
intent or obligation to update these "forward-looking" statements.
Contact Information: Contacts:
Chuck Coppa
CFO
Lyle Jensen
CEO
GreenMan Technologies
800-526-0860